ARSD 67:16:03:06. Basis of reimbursement -- Inpatient services -- In-state hospitals

Reimbursement for services provided for a patient admitted to an in-state prospective payment system hospital is based on the diagnosis-related group (DRG), weight factor, and the hospital's base rate. Hospital base rates, DRGs, and associated weight factors may be obtained on the department's fee schedule website. The department shall calculate the amount of reimbursement by multiplying the base rate by the weight factor of the DRG assigned to the claim. In addition to the regular DRG reimbursement, the department shall pay for a cost outlier if the department determines the claim qualifies for the cost outlier. The amount of the cost outlier payment is calculated by subtracting the DRG base payment plus the fixed loss ratio from the allowable estimated cost, multiplied by the marginal cost percentage published on the department's fee schedule website. The estimated cost of a claim is calculated by multiplying the hospital's assigned cost-to-charge ratio by the charges submitted on the claim. When calculating the rate of reimbursement, the department uses only the diagnosis codes that reflect the services furnished to or on behalf of the eligible patient and the conditions that affected the treatment or extended the length of the patient's stay. If a patient is transferred, referred, or discharged to another hospital or another type of special care facility and the transfer, referral, or discharge is medically necessary, or if a patient leaves the hospital against medical advice, reimbursement is on a prorated basis not to exceed one hundred percent of the allowed DRG payment. The prorated payment is calculated by dividing the DRG base payment by the All Patient Refined-Diagnosis Related Group's national average length of stay and multiplying the result by the covered number of days, plus one.